Tech stocks don’t come more volatile than Turtle Beach (NASDAQ:HEAR). The gaming headset maker has taken investors on an incredible rollercoaster ride plotted with sudden rises and falls. Is there ever a good time to buy HEAR stock?
Tech Stocks to Watch: HEAR Stock
HEAR stock has to take the crown for being one of 2018’s most volatile stocks. Shares began the year selling for under $2, but by August had surged to more than $30. However, by the beginning of 2019, they were cut in half.
A downward trend has since dominated, and in the first half of this year, HEAR stock has fallen nearly 30%.
Today, shares are selling for $10.51 USD and are in the green to the tune of roughly 3%. There is a lot of damage left to repair, but investors will take what gains they can.
Rise and Fall
Turtle Beach’s meteoric rise and fall were driven by the huge and sudden demand for gaming headsets. With the explosive growth of “battle royale” games, the need for players to communicate via headsets drove sales. One game, in particular, caused the biggest frenzy: Fortnite.
According to The Motley Fool:
“Turtle Beach launched the first Xbox One-compatible wireless gaming headset just as the battle royale boom started, and it reaped massive rewards with triple-digit sales growth throughout most of 2018.”
HEAR stock exploded as popularity for Fortnite grew but bears argued that the game was supplying a short-term boost in demand. The bears were right, and in 2019, Turtle Beach’s growth has reversed as hype over Fortnite dies down, and the majority of players have secured themselves a headset.
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Challenges Ahead
The biggest question for HEAR stock investors is whether these shares can expect another rally. Well, the gaming climate is now different than it was two years ago, and this suggests that another seismic climb is unlikely. There are serious profit-taking challenges ahead.
For example, Turtle Beach now faces stiffer competition, declining video game sales, and waning interest in battle royale games.
In particular, gaming giants Sony (NYSE:SNE), Microsoft (NASDAQ:MSFT), Logitech (NASDAQ:LOGI), and Razer (OTCPK:RAZFF) now sell similar gaming headsets.
Plus the company contends with long headset upgrade cycles (it’s headsets last up to two years). So whilst the company currently holds approximately 40% of the console headset market, this may change. We are entering the period when many of those excited headset buyers of 2017 will start upgrading. But the need for headsets is less palpable now, and the pool of competitors stronger. For this reason, in terms of market share percentages, 2020 might look very different. However, in terms of HEAR stock performance, the results may be all too similar.
What are your thoughts?
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